UiPath shares plummeted over 30% on Wednesday following the announcement that CEO Rob Enslin will resign effective June 1. Co-founder Daniel Dines, who stepped down as co-CEO on January 31, will assume the CEO role once again.
Enslin expressed confidence in UiPath’s future in the AI and automation market, noting that his decision to step down came after much reflection. Dines co-founded the company in 2005 with Marius Tirca, creating software that automates repetitive tasks. However, the company’s stock has struggled under Enslin’s sole leadership, declining 26% year to date after its high-profile IPO in 2021.
In its fiscal first-quarter earnings report, UiPath announced a 16% year-over-year revenue increase to $335 million, slightly above the consensus estimate of $333 million. The company also reported adjusted earnings per share of 13 cents, surpassing the estimate of 12 cents per share. Loss per share improved to 5 cents from 6 cents in the same period last year.
Chief Financial Officer Ashim Gupta cautioned that sales cycles for larger, multiyear deals are lengthening, and customers are imposing increased deal scrutiny. These factors, coupled with the leadership change, have impacted the company’s updated full-year guidance. UiPath now anticipates full-year revenue to range between $1.405 billion and $1.41 billion, down from the previous forecast of $1.55 billion to $1.56 billion.
Enslin, who joined UiPath from Google Cloud, was initially praised by Dines for his operational expertise, which was expected to facilitate the company’s growth and allow Dines to focus on culture, vision, and product innovation. This strategy mirrored moves by other tech founders, such as Mark Zuckerberg’s decision to bring in Sheryl Sandberg as COO at Facebook, a move credited with maturing the company.
However, Enslin’s tenure did not produce the desired effect. UiPath’s stock, aside from a brief post-IPO surge, has consistently traded below its debut price, now down nearly 76% from its May 2021 IPO.
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